Page 75 - RusRPTSept23

historic transfer was from inefficient owners to more productive ones, according to Ruben Yenikolopov, a research director at Russia’s New Economic School, The Bell reports. Now the country is seeing the reverse process — assets are being acquired by inefficient owners selected because of their proximity to the Kremlin.
“The war is an excuse to grab property,” said Yenikolopov. “As in 1937, when people would inform [on their enemies] to get an apartment, now people are accused of being a foreigner so that their property can be seized on the cheap.” In the long term, this nationalization will lead to the stagnation of the Russian economy, warned Oleg Itskhoki, a professor at the University of California in Los Angeles. Ineffective management could lead to a fall in output that will undermine GDP growth.
6.0 Public Sector 6.1 Budget
Government revenues have risen in recent months. Nominal revenues to the consolidated budget (federal, regional and municipal budgets plus government social funds) were up in March-May by over 15% y/y. Budget revenues have increased significantly on higher output and wages, a rapid recovery of imports as well as corporate profits. In addition, the rise in budget revenues in real terms has been supported by an on-year slowdown in the rise of consumer prices and an on-year drop in producer prices for manufactures. Federal budget revenues in April-June were still down from twelve months previous as they remained depressed from the sharp slide in revenues from oil & gas taxes. The price of Urals blend crude oil has been much lower this year than a year ago, although oil tax revenues in ruble terms have been buoyed in recent months by the ruble’s low exchange rate compared to spring 2022.
On-year growth in consolidated budget spending slowed in late spring to around 10%. Federal budget spending growth eased to a slightly lower pace. The budget deficit that accrues basically to the federal budget has remained for its 12-month running sum at around 4.5−5% of GDP in recent months.
RUSSIA Country Report September 2023 www.intellinews.com